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Legalized Gambling

by Jerry "Jet" Whittaker
June 29, 2006

One of the customary clichés used by proponents of legalized gambling is that if we institute legal gambling, we will drive out illegal gambling. This squabble makes a number of faulty assumptions. Firstly, it assumes that people are going to gamble anyway; thus, the state might as well get a piece of the action. Secondly, it assumes that given the choice, people would rather gamble in a state-sponsored program as it will be regulated. The state, the argument goes, will make certain that the program is fair and that each participant has an equal chance of winning. Thirdly, it assumes that if the state enters the gambling arena, it will drive out illegal gambling because it will be a more efficient competitor for gamblers' dollars.

Legal arguments

The arguments appear as sound, but they are not. Although a number of people do gamble illegally, most citizens do not. Legalized gambling, thus, entices people to gamble who normally would not gamble at all. Secondly, legal gambling does not drive out illegal gambling. If anything, just the opposite is true. As legalized gambling comes into a state, it endow with additional momentum for illegal gambling. The Organized Crime Section of the Department of Justice found that the rate of illegal gambling in those states which have a number of legalized forms of gambling was three times as high as those states where there was not a legalized form of gambling. And one national review found that legalized gambling in several states has not been a competitor to, but rather has become a stimulator of illegal gambling.

Reasons for growth of illegal gambling

The reasons for the growth of illegal gambling in areas where legalized gambling survive are simple. Firstly, organized crime syndicates often use the free publicity of state lotteries and pari-mutuel betting to run their own numbers games. The state essentially saves them money by providing publicity for events involving gambling. Secondly, many gamblers would rather bet illegally than legally. When they work with a bookie, they can bet on credit and don't have to details their winnings to the government. These are at least two things they can't do if they bet on state-sponsored games and this explicate why illegal gambling thrives in states with legalized gambling.































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